The state-run Hamshahri newspaper published a report on May 23 regarding a new wave of price increases in dairy products. The report shows that rising dairy prices have once again entered an upward trend. According to the Dairy Products Association, increased production costs have reached a critical stage. This situation has made rising dairy prices an unavoidable outcome. At the same time, discussions over currency liberalization and supplying livestock feed with free-market currency have created additional pressure. This trend has turned rising dairy prices into one of the main issues in the food market.

The Collapse of Investment in Iran, the Shutdown of Production, the Downward Spiral of Life

Rising Dairy Prices Are the Result of Pressure on the Production and Consumption Chain

The increase in exchange rates and changes in the method of supplying livestock feed have raised production costs. Under such conditions, according to industry activists, rising dairy prices are the direct result of pressure on the production chain. Factory owners also speak of shrinking profit margins and pressure from the consumer market. They believe that continuation of this trend could reduce production capacity in some facilities. Amid this trend of rising dairy prices, exports have been raised as a compensatory option. Increased transportation costs have also contributed to higher final prices.

According to the state-run Hamshahri newspaper, dairy industry experts warn that the pricing structure has become unstable. This instability has placed additional pressure on both producers and consumers. The dairy market has experienced repeated fluctuations in recent weeks. These fluctuations have increased concerns about price stability. Some production units have also reported declining demand in the domestic market. Changes in currency policies have played a key role in these economic developments. Some economic analysts consider this trend the result of a flawed distribution structure. Ultimately, both the production and consumption chains have come under pressure.

Rising Dairy Prices and Reduced Consumption Among Low-Income Families

Rising dairy prices have reduced consumption among many low-income families. This decline in consumption carries significant nutritional and health consequences. Reports indicate that rising dairy prices could affect public health. Reduced access to dairy products has increased concerns about diseases related to calcium deficiency. Health experts emphasize the importance of dairy consumption in the diet. However, rising prices have limited the purchasing power of many households.

This situation has made the economic divide in the consumption of essential goods more visible. Citizens in urban markets are expressing concern about rapid price changes. These concerns have also led to declining confidence in economic stability. Some reports indicate reduced demand in local stores. Changes in household consumption patterns in the food sector are becoming increasingly noticeable.

The report by the state-run Hamshahri newspaper presents a picture of increasing pressure on the dairy market. The report shows that the pricing structure is facing serious challenges. Rising production costs and currency fluctuations play the main role in this situation. The consumer market has also experienced declining demand in response to these changes. This cycle of pressure has affected both producers and consumers. Overall, this trend is a sign of instability in the market for essential goods. Reports indicate that this situation is likely to continue in the coming months.

The collapse of investment in Iran means the halt of production, widespread unemployment, capital flight, the destruction of job security, and the decline in the quality of life for millions of citizens. Official statistics and statements by economic activists show that the Iranian regime is not only incapable of rebuilding the engine of production but has also pushed the economic environment into a stage of chronic instability through ineffective policies.

Lack of investment causes businesses to first reduce production capacity, then lay off workers, and ultimately shut down. Reports published in recent months provide a clear picture of this downward spiral.

Iran’s Economy Beneath the Rubble of War and Structural Collapse

Investment Stopped, Unemployment Began

According to published data, gross fixed capital formation fell to negative 4.3% from March to September 2025. This means the halt of new projects, deterioration of machinery, a decline in construction, and the destruction of employment capacity. Investment in machinery has also dropped from positive growth to negative 2.5%, while construction investment has entered negative territory as well.

This trend has directly targeted the labor market. In the summer of 2025, the number of employed people in the country declined by about 171,000, while at the same time the inactive population increased by more than one million. This means a large portion of society no longer has hope of finding work and has withdrawn from the economic cycle.

The collapse of investment in Iran’s economy is not merely the result of sanctions or war. The crisis is deeper than these simple explanations. Over the years, the economic structure under the control of the Iranian regime, through systematic corruption, a rent-seeking economy, suppression of the genuine private sector, and political uncertainty, has destroyed the motivation for investment. Capital grows in an environment where legal security, economic stability, and predictability exist — elements that have long disappeared from Iran’s economy.

Reports concerning the country’s industries show that around 80% of production units have faced declining activity. Many factories have laid off part of their workforce due to shortages of raw materials, export disruptions, energy outages, and liquidity crises. This situation is not limited to industry; agriculture has been equally affected by collapse.

In agriculture, producers who for years cultivated export products are now facing collapsing prices and the closure of foreign markets. Farmers who once considered production profitable now prefer to lease out their land. When income from renting land exceeds income from production, it means the productive economy no longer has the ability to survive.

A Worn-Out Economy Surrounded by Inflation and Uncertainty

The collapse of investment is impossible without chronic inflation. Inflation exceeding 60% in Iran’s economy has not only destroyed people’s purchasing power but has also eliminated any possibility of economic planning. An investor enters production only when they can predict future costs, exchange rates, and sales markets.

The result of this situation is the growth of speculation and the weakening of production. Instead of entering factories and industry, capital flows into currency markets, gold, housing, and brokerage activities. In such a structure, genuine producers effectively become victims of the Iranian regime’s rent-seeking and inflationary policies.

The energy crisis has also become one of the major factors behind the destruction of investment. Severe electricity and gas imbalances have caused many factories to operate at half capacity or temporarily shut down. How can a producer who faces daily power outages and gas restrictions plan to expand operations?

At the same time, the banking network has effectively ceased playing its developmental role. Although the volume of bank loans has increased, most of these resources are being used to repay previous debts or cover current expenses. Banks are no longer engines of investment; they have merely become mechanisms to prevent the complete collapse of indebted businesses.

On the other hand, the sharp reduction in development spending shows that the Iranian regime has even lost the ability to make public investments. The share of the development budget has fallen to around 4.6%, a figure that reflects the paralysis of infrastructure and development projects. Without investment in infrastructure, the private sector also has no possibility for growth.

The Collapse of Livelihoods Under a Rent-Seeking Economy

The ultimate consequence of the collapse of investment is the destruction of household livelihoods. Widespread unemployment, declining real incomes, and severe inflation have rapidly shrunk the middle class and turned poverty into a widespread phenomenon.

This is the same cycle that economists describe as a widespread recession — a situation in which crisis spreads from one sector to the entire society.

The Research Center of the regime’s Majlis (parliament) has also acknowledged that economic growth had sharply declined even before the recent war. Internet shutdowns, the energy crisis, political uncertainty, and financing problems have caused growth in the services and agricultural sectors to turn negative. This issue shows that the roots of Iran’s economic crisis are not merely in external tensions, but in a worn-out political and economic structure that has lost the ability to generate stability and development.

Over the years, the Iranian regime has destroyed the foundations of economic development by suppressing independent institutions, expanding the rent-seeking economy, and prioritizing political and security objectives.

The state-run Khabar Fori website wrote on May 22 that the phenomenon of “poor billionaires” has become one of the latest signs of the economic crisis in Iran. Economists say the uncontrolled rise in asset prices, alongside the collapse of people’s purchasing power, has created a society in which many citizens appear wealthy on paper but in practice are unable to manage their daily lives.

In recent years, chronic inflation and the collapse of the national currency’s value have caused housing, automobiles, and durable goods prices to increase severalfold. These price increases have turned millions of people into owners of billion-rial assets. Nevertheless, a large portion of these same individuals face financial crises when trying to pay for basic living expenses, car repairs, home maintenance, or even essential goods.

40 million Iranians Below Poverty Line

Economists describe this situation as the rise of “poor billionaires,” a term that reflects the obvious contradiction in today’s Iranian economy — a society in which the apparent value of assets has expanded while the real ability to live has collapsed. Amir Hossein Khaleghi, an economist, told the state-run Fararu media outlet on May 14: “We are now facing a type of poverty that cannot be measured solely by income or wealth indicators. A phenomenon gradually revealing itself is the emergence of poor billionaires — people who may appear to own cars or homes, but cannot afford their maintenance, repairs, and ongoing expenses.”

The sharp rise in housing prices is one of the most important factors behind the emergence of the poor billionaire class. Today, even a small apartment in Tehran is worth tens of billions of rials. However, many owners of these homes have incomes that do not even cover ordinary living expenses.

The same situation can be seen in the automobile market. Cars that until a few years ago were among the cheapest products on the market now carry billion-rial price tags. Yet the owners of these vehicles struggle to pay for insurance, repairs, or even replacement of consumable parts.

The economic crisis has also spread to household appliances and consumer goods. Many families can no longer afford to replace worn-out appliances. Repairing a refrigerator, washing machine, or air conditioner has become a heavy expense for part of society.

Experts say the phenomenon of poor billionaires is the direct result of structural inflation and failed economic policies. Under such conditions, the increase in the nominal value of assets not only fails to create prosperity but also imposes greater psychological and economic pressure on people.

The Erosion of the Middle Class Under the Pressure of Crisis

At the same time as poverty expands, Iran’s middle class is rapidly eroding. A social group that once played an important role in cultural, social, and economic activities now spends a large portion of its income merely on survival.

Many teachers, engineers, office employees, doctors, and professionals who until a few years ago were considered part of the middle class are now crushed under the costs of housing, food, healthcare, and transportation. Living expenses have risen so sharply that a large segment of society no longer has the ability to participate in cultural and social activities.

Economists warn that the destruction of the middle class confronts any society with deep political and social crises. This class usually plays a balancing and reformist role. However, economic pressure has pushed it closer to the lower classes.

Meanwhile, many analysts speak of the emergence of a state of social suspension in Iran — a situation created by the regime in which people neither have hope for the future nor see any clear prospect for change.

The Regime’s Economic Deadlock

Experts trace the roots of the current crisis to decades of structural corruption, mismanagement, ineffective policies, and heavy government spending. Chronic inflation, the collapse of the national currency’s value, sanctions, and political crises have pushed Iran’s economy to a point where even asset owners feel poor.

Alongside these problems, uncertainty and regional crises have also pushed the economy into a deep recession. Many businesses remain in a state of limbo, and people have stopped making non-essential purchases.

It must be emphasized that a structure which for decades has spent the country’s resources on corruption, repression, and political projects has now brought society to a stage where even owning assets is no guarantee of a quality life. Under such conditions, millions of citizens are struggling merely to preserve the minimum necessities of life.